CONCEPT OF SUCCESSION

Chapter 2
Chapter Objectives:
• To understand the concept of succession
• To understand the types and elements of succession
• To understand the nature of estate tax
• To understand the types of decedent and their taxation
rules
• To understand the model of estate taxation
SUCCESSION
- It is a mode of acquisition by virtue of which the property,
rights and obligations to the extent of the value of the
inheritance of a person is transmitted through his death to
another or others either by his will or operation of law.

Inheritance includes all the property, rights, and obligations

of a person which are not extinguished by his death.
Kinds of Succession
1. Testamentary. Succession which results from the designation of
an heir, made in a will executed in a form prescribed by law.

2. Legal or Intestate. Transmission of properties where there is no

will, or if there is a will, the same is void or with an invalid one,
the distribution of the estate shall be in accordance with the
default provision of the Civil Code on succession.

3. Mixed. Transmission of properties which is effected partly by will

and partly by operation of law.
Will

A will is an expression of the decedent’s desire as to how

his properties will be distributed after death.

The making of a will is a strictly personal act. It cannot be

left in whole or in part of the discretion of a third person.
Types of Wills

1. Holographic will – a will which is entirely written, dated

and signed by the hand of the testator himself.
2. Notarial will – a notarized will signed by the decedent
and witnesses.
3. Codicil – a supplement or addition to a will, made after
the execution of a will and annexed to be taken as a part
thereof, by which disposition made in the original will is
explained, added to, or altered.
Elements of Succession

1. Decedent. The person whose property is transmitted

through succession, whether or not he left a will.
2. Heir. The person called to the succession either by the
provision of a will or by operation of law.
3. Estate. Refers to the property, rights and obligations of a
person which are not extinguished by his death.
Heirs

The law identified certain persons which it designated as

“compulsary heirs”.
Types of compulsary heirs

1. Primary heirs : Legitimate children and their direct

descendants.
2. Secondary heirs : Legitimate/Adoptive parents and
ascendants
3. Concurring heirs : The surviving spouse and illegitimate
descedants.
Definition of Terms
1. Legitimate children - those born out of a legal marriage
2. Direct descendants - refers to children, or, in their absence,
grandchildren.
3. Legitimate parents -refer to biological parents
4. Illegitimate parents - are adopting parents to an adopted child
5. Surviving spouse – is the widow or widower of the descendent
6. Illegitimate descendants - are illegitimate children.
Summary of rules

1. Concurring heirs; and

a. Descendants; or; in their default
b. Ascendants
2. Relatives in the collateral line up to the (5th) degree of
consanguinity
3. Republic of the Philippines
Other Persons in Succession

1. Legatee – a person whom gifts of personal property is given

by virtue of a will.
2. Devisee – a person whom gifts of real property is given by
virtue of a will.
3. Executors – a person named by the decedent who shall carry
out the provisions of his will.
4. Administrators – a person appointed by the court to manage
the distribution of the estate of the decedent.
Legitime
• Legitime is that part of the testator's property whch he
cannot dispose of because the law has reserved it for
certain heirs who are, therefore, called compulsory heirs.
Disinheritance
• When a person expects or is expected to inherit, but does
not, the person is said to be disinherited.
• Disinheritance can be effected only through a will wherein
the legal cause therefore shall be specified.